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DECREE No

DECREE No.38-CP OF APRIL 28, 1997 AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF DECREE No.50-CP OF AUGUST 28, 1996 OF THE GOVERNMENT ON THE ESTABLISHMENT, REORGANIZATION, DISSOLUTION AND BANKRUPTCY OF STATE ENTERPRISES

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

At the proposal of the Minister of Planning and Investment and the Standing Board of the Central Steering Committee for the Renewal of Enterprises,

DECREES:

To amend and supplement a number of Articles of Decree No.50-CP of August 28, 1996 as follows:

Article 1.- To amend and supplement Items 1 and 3 of Article 2 concerning the statutory capital for the establishment of a State enterprise into the following:

"1. The statutory capital at the time of establishing a State enterprise must not be lower than the highest level of legal capital set for the allowed business lines prescribed in Appendix No.2 attached to Decree No.50-CP.

The Ministry of Finance shall coordinate with the Ministry of Planning and Investment in examining and ratifying every project of State enterprises which have been established before the promulgation of this Decree or of dependent cost-accounting units that need to be transformed into independent cost-accounting units in newly split provinces (in accordance with the Resolution of the 10th session of the IXth National Assembly) and other special cases where the statutory capital is lower than the above-prescribed level. The general principle is to ensure that State enterprises can conduct their business activities normally and in accordance with the annual State budget plan; there shall be no en-bloc approval."

"3. The establishment of a State enterprise without available statutory capital is strictly forbidden. The borrowed capital shall not be included in the statutory capital of a State enterprise, except for the soft loans provided by the State."

Article 2.- To amend Item 3, Article 3 on the person proposing the establishment of a State enterprise as follows:

"3. The person proposing the establishment of a State enterprise is authorized to sign decisions on the establishment of a number of State enterprises which he/she has founded after the Prime Minister or a Minister authorized by the Prime Minister has examined the project and approved it in writing."

Article 3.- To amend Article 4 on deciding the establishment of a State enterprise as follows:

"Article 4.- Deciding the establishment of a State enterprise.

1. After ratifying the projects on the establishment of State enterpises stipulated in Points a and b below, the Prime Minister shall decide the establishment of a number of State corporations and a number of especially important enterprises; the Prime Minister authorizes:

a/ The Minister of Defense and the Minister of the Interior to sign decisions on the establishment of a number of State enterprises directly serving national defense and security;

b/ The Ministers managing economic-technical branches, the Presidents of the People�s Committees of the provinces and cities directly under the Central Government to sign decisions on the establishment of a number of State corporations operating in the form prescribed in Decision No.90-TTg of March 7, 1994, a number of enterprises with the statutory capital at the time of their establishment equivalent to the investment capital of Group A projects as prescribed in Decree No.42-CP of July 16, 1996; the Ministers managing economic-technical branches to sign decisions on the establishment of member enterprises of State Corporations that have been set up by decision of the Prime Minister.

2. The Ministers managing economic-technical branches to decide the establishment of State enterprises which are members of State corporations set up by decision of the Ministers authorized by the Prime Minister and the public utility enterprises founded by themselves.

3. The Presidents of the People�s Committees of the provinces and cities directly under the Central Government to decide the establishment of the member enterprises of State corporations which have been set up by decision of the Presidents of the provincial/municipal People�s Committees authorized by the Prime Minister and the public utility enterprises established by themselves or at the proposals of the People�s Committees of second category cities, districts or provincial towns in the localities.

4. The Minister of Planning and Investment shall assist the Prime Minister in examining the projects and giving written consent to allow the Ministers, the Presidents of the People�s Committees of the provinces and cities directly under the Central Government to sign decisions on the establishment of State enterprises not prescribed above but proposed by the Ministries managing the economic-technical branches and the Presidents of the People�s Committees of the provinces and cities directly under the Central Government."

Article 4.- To amend Item 1, Article 7 on the evaluation of State enterprises as follows:

"1. The person competent to decide or authorized to decide the establishment of a State enterprise shall assign an attached organization to assume the main responsibility in processing the dossiers on the establishment and reorganization of State enterprises. The Central Steering Committee for the Renewal of Enterprises shall assume the main responsibility in processing the dossiers proposing the establishment and reorganization of enterprises set up by the decision of the Prime Minister or the authorized persons. The Steering Sub-Committees for the Renewal of Enterprises of the ministries, the People�s Committees of the provinces and cities directly under the Central Government shall assume the main responsibility in processing the dossiers on the establishment of enterprises that have been set up by decisions of the concerned Ministers or Presidents of the People�s Committees of the provinces or cities directly under the Central Government or the authorized persons. The person deciding or authorized to decide the establishment of an enterprise shall have to set up an Evaluation Council composed of a number of experts about the contents to be evaluated, who shall together with the Central Steering Committee or the Steering Sub-Committees for the Renewal of Enterprises examine dossiers which propose the establishment of enterprises."

Article 5.- To amend, supplement Items 1 and 2, Article 13 on changes after registering business as follows:

"Article 13: The Prime Minister authorizes the Chairmen of the Managing Boards of the corporations established by the Prime Minister�s decisions:

- To decide to change or add business lines corresponding to the statutory capital and technological conditions of each enterprise (except for the business lines subject to the separate provisions, which must be permitted by the Prime Minister or must have business licenses),

- To rename the enterprise if the new name is not contrary to the main business lines of the enterprise and comply with the guidances of the branches concerned.

After deciding to change the business lines and the name of the enterprise, the Chairman of the Managing Board must report the changes to the Prime Minister."

Article 6.- To add the following Item 3 to Article 17 concerning objects of application:

"3. The Party organizations, the socio-political organizations which have earlier been allowed by the Prime Minister to apply Decree No.388-HDBT of November 20, 1991 of the Council of Ministers (now the Government) on the establishment and dissolution of State enterprises shall all now comply with Decree No.50-CP of August 28, 1996 of the Government and the relevant regulations. The dossiers on the establishment of enterprises of the Party and mass organizations in the provinces and cities directly under the Central Government shall be sent to the Presidents of the People�s Committees of those provinces and cities; the dossiers on the establishment of enterprises of the Party and mass organizations at the central level shall be sent to the Minister managing the related economic- technical branch of the major business line in order to organize the evaluation and decide the establishment."

Article 7.- This Decree takes effect 15 days after its signing.

Basing itself on the above-said contents, the Ministry of Planning and Investment shall provide guidance to the branches and localities for uniform implementation. At the same time it shall work out and submit to the Prime Minister for promulgation the regulation on the naming of enterprises (of various economic sectors), to ensure that the names of enterprises of the same type in the same locality shall not coincide, thus preventing the infringement upon the enterprises� ownership right over their names.

The Ministry of Finance shall provide guidance on the principles for certifying the statutory capital for the establishment of State enterprises and promulgate regulations on the financial regime and procedures for the dissolution of State enterprises in replacement of the annulled regulations.

The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People�s Committees of the provinces and cities directly under the Central Government and the concerned organizations shall have to implement this Decree.

On behalf of the Government

The Prime Minister

VO VAN KIET